HT-2024-000379 - [2025] EWHC 2769 (TCC)

The Claimant seeks a summary determination of the reasonableness of Clause 7(b). It submits that even at this early stage the Court can and should make such a decision. The relevant reasonableness test is set out at Section 11(2) of UCTA. The Court is to have regard to the matters in Schedule 2 of the Act. The factors listed in Schedule 2 are as follows:

“(a)

The strength of the bargaining positions of the parties relative to each othertaking into account (among other things) alternative means by which the customer’s requirements could have been met;

(b)

Whether the customer received an inducement to agree to the term or in accepting it had an opportunity of entering into a similar contract with other persons but without having a similar term;

(c)

Whether the customer knew or ought reasonably to have known of the existence and extent of the term (having regard, among other things, to any custom of the trade and any previous course of dealing between the parties);

(d)

Where the term excludes or restricts any relevant liability if some condition was not complied with, whether it was reasonable at the time of the contract to expect that compliance with that condition would be practicable;

(e)

Whether the goods were manufactured, processed or adapted to the special order of the customer.”

The Claimant referred me to two cases where the Courts had decided the reasonableness of the exclusion clauses at a summary judgment application. Both of these cases - Stuart Gill Ltd v. Horatio Myer & Co Ltd [1992] QB 600 and Rohlig (UK) Ltd v. Rock Unique Ltd [2011] EWCA Civ 18 - were cases dealing with “non-withholding” clauses, i.e., cash-flow clauses, rather than with the reasonableness of clauses which exclude remedies more widely. As the Court of Appeal pointed out in Stuart Gill at p.604G-H, not making a summary determination on such a claim at the summary judgment or preliminary issue stage would “render the clause nugatory since by the end of the final hearing it would not matter whether there was a set-off or separate judgments on claim and counterclaim.” In that regard, see also Rohlig at para.15. I don’t accept that a summary judgment application is the appropriate form of application to decide issues of reasonableness in the wider context. The two cases relied upon by the Claimant are not authorities for that proposition and are clearly distinguishable.

I was also referred to Watford Electronics Ltd v. Sanderson CFL Ltd [2001] EWCA Civ 317; Granville Oil & Chemicals Ltd v. Davies Turner & Co Ltd [2003] EWCA Civ 570; and Overseas Medical Supplies Ltd v. Orion Transport Services Ltd [1999] 2 Lloyd’s Rep 273. Watford and Granville were both preliminary issue trials at which evidence was heard and disclosure of the relevant documents would have been provided. Both parties relied on Overseas Medical, an appeal following a trial of the issue which included cross-examination of witnesses. The Defendant referred me to Paragraph 10(3) of that case:

“In relation to equality of bargaining position the court will have regard not only to the question of whether the customer was obliged to use the services of the supplier but also to the question of how far it would have been practicable and convenient to go elsewhere.”

I have already noted that there is a factual dispute about that issue on the evidence before me. That evidence is incapable of being decided on a review of the papers and will require further consideration and no doubt oral evidence from both parties as occurred in Overseas Medical. That issue of itself demonstrates that this Court cannot and should not determine whether Clause 7(b) satisfies the requirement of reasonableness under UCTA as part of this summary judgment application. The answer to this issue is that the Court cannot determine that issue as part of this application.